Auctions: Walk- about versus formal gavel bidding?

As most of you know, I am a hobby potter. My big schtick is held once per year at the local art gallery.

I donate my work to the gallery for a fund raiser. In essence this event makes money for the gallery but the artist too gets a cut. For example, in the past, when I have sold a typical $100.00 plate I get a 50% commission or the equivalent in an income tax receipt.

At this event, people wear black. They go from table to table drinking wine and eating delicious food. They take a pen and write the amount they think your work is worth on a bidding pad with your suggested starting amount.

This year, in addition to this walk about, they will an auctioneer present work. Bids will start at $200.00.

Thus, there will be both a walk about bidding option and a sit down, drink your wine and have the auctioneer try to illicit bids for different pieces.

They have asked me to donate work to both venues.

Here are my thoughts:

Benefits: Exposure two ways.

Draw backs: Auctioneer exposure could be more revealing and result in lowering of my confidence. Something about having people walk around and sign up for my pieces seems easier. I don't have to hear about the results and be exposed by my name openly. And what if no-one buys the plate starting at $200.00??

Approach: I expect that in an event such as this where you are contributing to two venues that it would smart for me to do dramatically different pieces for both the walk about and the haggle auction. Am I assuming correctly?? I mean, why would anyone pay $200.00 for a plate in the formal stand-up/gavel auction if they can get it for cheaper at the tables??

Does anyone have any thoughts on this topic or would care to share their artistic life experience in doing this.

On one hand I want to say it is an honor to be asked to do both. On another, I wonder if I will fall in over my head if my work is not sold. I could feel hurt and local embarrassment.

Further to this, I am wondering about whether this is even a good marketing option for the event??

Know that the only auction events I have been to are at Anderson Ranch. There you ate a delicious meal and simply had an auctioneer walk around with the pieces. There were no table set ups at the event I attended. I wonder if this could prove to be non- competitive with people preferring the tables to the auctioneer??

Anyway, my thoughts. I have two weeks to get some small body of work done and finished.

For example, in the past, when I have sold a typical $100.00 plate I get a 50% commission or the equivalent in an income tax receipt.

Nelly,

Tangential subject from your posting.........

Under current tax laws, an artist is not allowed to deduct appraised value, market value, or anything like that. All you can deduct is the "cost of goods" that would be filed into a Schedule C. And not even for your labor. So it is basically the amount you paid for clay, glaze materials, and firing costs.

Someone who BUYS your work with cold hard cash (personally or at auction or from a gallery or shop) and THEN donates that work to an approved charity (tax deductible) can deduct the full amouint that they paid you for it. But you can't.

So I am pretty certain that if you have been claiming those 50% of retail auction value receipts .......it is not allowable.

For example, in the past, when I have sold a typical $100.00 plate I get a 50% commission or the equivalent in an income tax receipt.

Nelly,

Tangential subject from your posting.........

Under current tax laws, an artist is not allowed to deduct appraised value, market value, or anything like that. All you can deduct is the "cost of goods" that would be filed into a Schedule C. And not even for your labor. So it is basically the amount you paid for clay, glaze materials, and firing costs.

Someone who BUYS your work with cold hard cash (personally or at auction or from a gallery or shop) and THEN donates that work to an approved charity (tax deductible) can deduct the full amouint that they paid you for it. But you can't.

So I am pretty certain that if you have been claiming those 50% of retail auction value receipts .......it is not allowable.

The tax laws are NOT in the artist's favor.

best,

.....................john

Dear John,

I wonder if the same situation happens here in Canada. I usually take the cold hard cash??

Good information though. I am sure you are correct regarding the donation issue.

My angst is that my insurance company will not in anyway cover me if I sell anything. Thus, by presenting it as a "donation" they said it is okay?? Having said this, one could argue I am guessing that I am actually selling at least part of it??

That is why I do what I do. I don't sell anything otherwise. I give everything away due to the insurance issue. I only participate in this one show thinking I am in some way donating the 50%. I wonder how that would stand up in court??

Nelly,
John is correct about artists being able to deduct the cost of materials for donations.
The gavel bidding and the walking around type of bidding are what we call Live and Silent auctions in Montana.
Live auctions are reserved for more expenses pieces. Silent auctions are generally for less expensive pieces.
Live auctions can be exciting and can go quite high. Make some special piece for that auction. You may find it a professionally good thing to do.
If it was a worthy cause...not sure a gallery benefit is such an event, donating 100% can get you some recognition. When you consider the
cost of materials, it may be better for your reputation.

I hate to sound like crabby Appleton, but the people at these events are usually trying to get the art or items at the lowest price. The live auctions only go slightly better with a great auctioneer and lots of liquor. I also do not know any artists who have ever gotten a further sale or even an order from one of these events. I myself have seldom gotten even a Thank You from the group who got my art.
Hmmm ... I do sound crabby ... I stopped giving to these galas except for causes I truly believe in since essentially it is a loss for me.
Now, if you do want a good charitable write off, find a friend who is also in the show and trade so that they donate your work and you donate theirs. That way you do get to write if off as a charitable donation.

All John said is the way it is in the USA
The only exception is if they advertise your name _say in an add or paper (I'm told by a CPA) is one can then call it advertising on your tax form.Which has some write off value.
Mark

All John said is the way it is in the USAThe only exception is if they advertise your name _say in an add or paper (I'm told by a CPA) is one can then call it advertising on your tax form.Which has some write off value.Mark

I have been to only one event at, as I said, Anderson Ranch. I did see a top-notch artist from Santa Fe, put his work in the auction and it never made it to the stage to be sold. Thus, it ended up in a bin where anyone could pay anything for the piece. He was very, very disappointed.

Do know I am not a business. I have no business license at this point what-so-ever. Given that I teach at a university, I never want a conflict of interest in terms of how my time is spent. I also do not work in art at the university.

I am 52 years old and figure in a few years, I will gear up for more of a business in art doing country fairs and shows.

I know John has given me very good advice. I usually take the cash and go home with some money. It is the exposure that I am after.

I do, however, wonder now, if it may be to my advantage to donate the whole lot of money. I have plans to get the local ceramic artists involved in a empty bowls program sometime in the next year. This may serve as a strong launching or networking point for me.

I think Marcia, is also 100% correct. I have been told that when my work has been put on the tables on the tables that people do not go much higher than the starting bid.

We are also in a recession. Everyone is counting every single dollar very, very closely.

Where I live, there is a true sense of hunger among the tradesmen. I have felt it with my renovations.

I think, again, I could only write this off as a whole donation if I had an incorporated business--which I don't.

I have been pondering today what to make Marcia. I think it will likely be a sculptural piece done in majolica or bright colors. Modern. Abstract. A different approach than the traditional platters, bowls and plates I will make for the tables. It will stand out.

I do not think you are being a crabby appleton Chris. I have seen, as I said, really good artist go with the best of intentions to donate a piece only to be really let down at one of these things. They leave feeling really deflated especially after giving some of their good stuff up to the auctioneer.

So, what to do??

1. I will drop the stuff off, take my complimentary tickets for the event and give it to someone else so I do not have to be there to watch.

2. I will make three pieces. Two platters or serving trays and one large sculptural piece. I still have three weeks and my drying room is on full tilt right now. But know I am still in production.

3. I will investigate the money issues on Monday. I will figure out if I can deduct this money despite not having a business license and if my insurance company will be okay with this approach. They have in the past but you never know??

I am pretty sure that here where I am, all the wine in the world will not make anyone buy more. It is part recession and part lack of awareness of art. The money, as I said, is going directly to the local art gallery representative of the city.

Thank you all for your responses. I knew you would know and I guessed many of you have been asked for contributions for these events. I just wondered how you handled it.

I don't think you will be able to claim anything but the costs of raw materials on your donation ... The IRS doesn't care if you are a real business or a real artist ... At best, you would have to verify that the item you are claiming against has sold in other venues for the price you have put on it. I seem to have a vague memory of the law being changed to that, but not sure if there was a limit on the price you were claiming.

I don't think you will be able to claim anything but the costs of raw materials on your donation ... The IRS doesn't care if you are a real business or a real artist ... At best, you would have to verify that the item you are claiming against has sold in other venues for the price you have put on it. I seem to have a vague memory of the law being changed to that, but not sure if there was a limit on the price you were claiming.

Dear Chris,

Thank you for your reply. I will figure this all out on Monday. They did call to say they wanted a representative piece for their brochure. I will wait until Monday so I can get all my questions answered. This gets so complicated?? I think I will focus on donation plain and simple. In fact, if need be, I will just give it to them. That way I get in absolutely no trouble and it will build my resume in some odd sort of way. For this town, getting a chance to dress up in black and go out to an "art" event is a big deal. It is hob nobbing affair. It will attract those who want to be seen. Not necessarily those who want art. But you are right, of those that are there they will want it cheap.